## Facts

- Erich Wolff, a physician, had personal and medical experiences connected to his late wife’s condition and treatment that he wanted used as source material for a motion-picture story.
- Wolff first hired Elsie Foulstone to prepare a motion-picture-style synopsis based on those experiences and ideas.
- Foulstone produced a synopsis titled “Swear Not by the Moon,” but Wolff was dissatisfied and ended her services.
- Wolff later engaged Victoria Wolf, a writer, to prepare a new synopsis and revisions based on the same general subject matter.
- Wolf wrote a synopsis and two revisions that Wolff approved; the second revision was titled “Case History.”
- On March 21, 1949, Wolff and Wolf sold and assigned “Case History” to Loew’s, Inc., a motion picture company, using Loew’s form assignment agreement.
- The agreement represented that the sellers were the sole and exclusive owners of the property and transferred to Loew’s “complete, unconditional and unencumbered title,” free from claims of others.
- The agreement also contained an indemnity provision addressing losses, damages, and expenses (including attorneys’ fees) arising from adverse claims or defects in title.
- After the sale, Foulstone sued seeking a portion of the sale proceeds, asserting that her earlier work entitled her to an interest connected to “Case History.”
- In that separate action, the court determined that Foulstone had no right or interest in “Case History.”
- Before Foulstone’s case was finally resolved, Loew’s filed this diversity action against Wolff and Wolf, seeking damages for breach of the title warranty and reimbursement of costs and attorneys’ fees under the indemnity clause based on Foulstone’s claim and related litigation activity.

## Issues

1. Did Wolff and Wolf breach the assignment agreement’s warranty that Loew’s received “complete, unconditional and unencumbered title” merely because Foulstone asserted a claim that was later rejected?
2. Did the agreement’s indemnity clause require Wolff and Wolf to reimburse Loew’s for attorneys’ fees and other expenses incurred in connection with Foulstone’s unsuccessful claim and the related title dispute?

## Decision

- Judgment for defendants Wolff and Wolf.
- No breach of warranty of title was shown because Foulstone’s asserted claim did not establish any actual competing right in “Case History,” and her claim was ultimately adjudged to be without merit.
- Loew’s could not recover under the indemnity clause for the expenses it sought, because the claimed “defect” in title was not a real defect and no adverse right in the story was proven.

## Legal Principles

- A contractual warranty of title to literary property is not violated simply because a third party asserts a claim; the buyer must show an actual defect in title or a valid competing right.
- “Marketable” or “perfect” title is not defeated by an unfounded lawsuit alone; the warranty concerns the existence of legal rights, not the absence of threats or accusations.
- Rights in literary property protect original expression, not general ideas, medical information, life events, or other factual material that remains available for others to use.
- An indemnity clause tied to adverse claims or defects in title does not automatically shift litigation costs when the third-party claim fails and no infringement or title failure is established.

## Conclusion

Loew’s received the title the contract promised because Foulstone had no legally recognized interest in “Case History,” and her unsuccessful attempt to claim proceeds did not, by itself, prove a defect in title or trigger indemnification; accordingly, the court entered judgment for Wolff and Wolf and denied Loew’s requested damages and fee recovery.


Loew's, Inc. v. Wolff, 101 F. Supp. 981 (1951)